Romania, a military technology hub?

In the past year, the Romanian army has seen the largest number of acquisitions and contracts, announced or concluded, as this has become a priority, both in terms of national security and compliance with the NATO requirements.

The Romanian Defense Ministry has developed major army equipment programs for all categories of forces: armored vehicles, missiles, corvettes, assault weapons and helicopters.

2018 is actually the second year when Bucharest has earmarked 2% of the GDP for defense, a decision made in keeping with the commitments made by Romania as member of the North-Atlantic Alliance, in support for regional security and with focus on the national interest. Moreover, Romanian officials talk about their wish to turn Romania into a military technology hub in the region. But how viable is this decision? Military analyst Radu Tudor is attempting an answer, pointing to Romania’s strengths.

Radu Tudor: “We have a huge potential, because otherwise we would not have exported armament worth 10 billion dollars between 1979 and 1989. So, from this point of view, we could bring this back to the table, our huge potential, which in the past 27 years has not been capitalized on. Obviously, we can negotiate our position. We are a welcoming and tolerant country, we want to achieve economic performance, and we are extremely relevant from a strategic point of view. Therefore, there are huge advantages on our part.”

Equally important is to understand that this moment must be turned to good account, Radu Tudor believes. Decision makers in Bucharest would like to apply the offset law, promoted 15 years ago, but which has been used insufficiently. This would entail the purchase of modern military technique, while at the same time supporting the Romanian economy, by involving Romanian companies in the manufacturing of such technique.

Because, as the Romanian Defense Minister Mihai Fifor has stated, the Romanian Government did not go shopping with the state’s money; the aim is to achieve a transfer of technology and to revitalize the Romanian defense industry.

Mihai Fifor: “This defense industry must be kick started and thus, by means of solid investment, we could become a regional hub of armament production. One of the Romanian Army’s top modernization programs refers to the production of 8x8 armoured transporters, which will be manufactured at the National Company for Military Technique in Bucharest. A lot of countries in the region are interested in becoming the clients of this company, which is something we’re very happy about”.

Romania could also become an important arms manufacturer and exporter in the region, Defense Minister Mihai Fifor claims, also referring to the army’s other top modernization programs. Minister Fifor said the first multirole corvette is due to become operational within three years, while some three military submarines will be manufactured in a Romanian military shipyard. Military analyst Radu Tudor has more details:

Radu Tudor: “At present, probably the highest-rated private company in the defense industry is Aerostar Bacau, a company that could become a regional leader by means of two contracts obtained with the Ministry of National Defense as part of its modernization program. The first project refers to the purchase of F-16 fighter jets. The second one refers to the purchase of Patriot missile systems. Our American allies regard Aerostar as the most viable solution, a company able to carry out maintenance and reconditioning works for both weapon categories, the fighter jets and the missile systems. In that respect, we realize the importance of securing such contracts for a Romanian company. So this is a huge step forward. Furthermore, the Piranha transporters could be assembled at the National Company for Military Technique, which could usher in a whole new era for this company, which was previously holding only insignificant military contracts. We could actually save this production unit, and even bring more people in. A third important military manufacturer is the one in Ploiesti. It is a private company involved in a missile-production program. But there are many other examples as well”.

Analyst Radu Tudor says the important thing for Romania is for most of these programs and contracts to be accompanied by offset agreements, which will present a huge opportunity, on the one hand, and require a great deal of technological upgrading. Romania can thus contribute components to the base products the army chooses to import, but also benefit from indirect offsets, by means of which products manufactured in Romania are sold to the country that produces a certain military technology, the costs of which are deducted from the value of the base contract.